Personal liability for whistleblowing compensation

Ben Power

7 months ago

In International Petroleum Ltd v Osipov (click here for full judgment) , a non-executive director (retained on a non-employed basis to make decisions for the company) instructed another non-executive director to dismiss the Claimant, who had brought to the first non-executive director’s attention matters which amounted to whistleblowing.

The EAT held that both the first NED’s instruction to the second NED to dismiss and the second NED actions in implementing the dismissal amounted to detriments short of dismissal because the Claimant had made a protected disclosure (whistleblowing). The EAT ordered both NEDs (joint and severally liable) to pay the Claimant compensation for injury to feelings and the Claimant’s loss of earnings post dismissal.

This case is interesting because the whistleblowing legislation permits a Claimant to receive an award for injury to feelings for a detriment, which is an act or omission short of dismissal but not for a dismissal itself. Further an individual cannot be personally liable for dismissal (only the employer).

On the face of it, this case seems to circumvent those rules. However, the EAT drew a fine line between implementing a dismissal and the dismissal itself. By finding detriments short of dismissal, the Claimant was entitled to receive an award of injury to feelings from the NEDs and second, the NEDs were also personally liable for his loss of earnings post dismissal.

We consider this case is quite similar to recent lines of authority in discrimination cases. A claim for a discriminatory dismissal against a company can be defeated where the actual decision maker for dismissal does not have any discriminatory motive and was not aware about the discriminatory motive of the employee whose instructions he/she is following. In this type of scenario, a prudent Claimant should focus his/her evidence on the instructing employee with the discriminatory motive and cite him as a personal defendant too. If the instructing employee is found to have discriminated against the Claimant he/she will be personally liable not only for injury to feelings but also the Claimant’s loss of earnings post dismissal.